Tighter System Liquidity Expected to Bolster Yields

Monday, March 5, 2018 /02:50 PM /Afrinvest ResearchLast week, the
Treasury Bills ("T-bills") secondary market sustained its bullish
performance for the second consecutive week on the back of improved system
liquidity and buying interests across tenors. Consequently, rates declined 4bps
W-o-W to close at 14.0% on Friday.At the Primary Market Auction last week, the 91, 182 and 364-day bills were
1.0x, 1.0x and 5.5x oversubscribed respectively following an allotment of
N130.0bn against a total subscription of N361.0bn. Due to improved system
liquidity and higher subscription, stop rates across all tenors declined. The
91, 182 and 364-day rates fell to 11.85% (vs. 11.95%), 13.50% (vs. 13.65%) and
13.50% (vs 13.70%) respectively.Please see available rates and tenor for today below:

Maturity

Tenor
(Days)

Rate
(%) p.a.

12-Apr-18

38

12.20

14-Jun-18

101

12.50

05-Jul-18

122

12.80

30-Aug-18

178

13.10

04-Oct-18

213

13.20

OMO
Auction

90
to 180 days

12.00

OMO
Auction

180
t0 300 days

13.50

Please note that rates are valid till 1:30pm today (05-Mar-18)

This week, an OMO maturity of N130.0bn is expected to hit the system. However,
we expect yields in the T-bills secondary market to trend higher on the back of
tighter system liquidity as the Apex Bank sustains its frequent OMO auction.